U.S. stocks were a mixed bag Wednesday as investors digested the Federal Reserve’s announcement that its fight against inflation remains too unfinished to cut interest rates. The Dow Jones Industrial Average jumped more than 200 points before Fed Chair Jerome Powell spoke, but the S&P 500 and the Nasdaq remained largely flat.
The Fed kept interest rates at 5.5% to 5.25%, as policy policymakers cited a “lack of further progress” on inflation.
Several disappointing earnings reports, inclduing from Starbucks, CVS and Pfizer, dampened investors’ enthusiasm. Apple will release its quarterly earnings Thursday, and analysts say the company could beat expectations despite an iPhone sales slip.
The Dow rose 203 points, or about 0.5%, to 38,019 in the afternoon. The S&P 500 was flat, and the tech-heavy Nasdaq was up slightly.
Amazon stock is rising after beating expectations
Shares of Amazon rose by nearly 3% Wednesday morning as the e-commerce giant reported better-than-expected revenue for its first quarter. That increase was in part led by Amazon Web Services (AWS) and its advertising, the company said in its earnings release. Amazon’s shares have risen by 74% over the past year. Sales for the company’s AWS division grew 17% year over year to $25 billion during the quarter. That surge in sales could put Amazon in a good position to compete with AI leaders like Microsoft and Alphabet.
Super Micro Computer drops more than 15%
Shares of Super Micro Computer, which joined the S&P 500 index in March, sank more than 15% Wednesday morning after the company missed analysts’ revenue expectations for its fiscal third quarter.
In its latest earnings report, the manufacturer of artificial intelligence hardware reported revenues of $3.85 billion, more than double the $1.28 billion from the same quarter last year. But Super Micro Computer missed Wall Street analysts’ expectations of $3.95 billion. Earnings per share came in at $6.56, beating expectations of $5.78.
CVS Health stock drops to a three-year low
Shares of CVS Health fell to a three-year low Wednesday morning after the company reported that it was grappling with rising healthcare costs. The drugstore chain reported adjusted earnings per share of $1.31, which is below the expectation of $1.69. Revenue rose 3.7% to $88.4 billion, missing the expectation of $89.21 billion.
The stock was down 20% in the morning trading.
Starbucks disappoints on earnings
Starbucks’ latest quarterly earnings report showed lower-than-expected revenue, earnings, and same-store sales growth. The company posted a net income of $772 million, down from $908 million the year before. The adjusted earnings per share were 68 cents, compared to 80 cents expected. The company’s revenue for the most recent quarter was $8.6 billion, while analysts expected $9.1 billion.
The stock shed more than 16% in the morning.
Bitcoin drops to $57,000
Bitcoin has continued its April wipeout into May, falling below $57,000 on Wednesday morning and technically entering into a bear market after its worst month in nearly 18 months.
The ongoing selloff, which sent Bitcoin’s price as low as $56,757 early Wednesday before a slight rebound, follows April’s closely-watched “halving” event and comes ahead of the Federal Reserve’s decision on interest rates. Bitcoin is now more than 20% below its record high of $73,803 set in March, though it’s still up about 30% so far this year.
-Francisco Velasquez contributed to the article
